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FTC Ruling On Non Competes - Mission to Grow: A Small Business Guide to Cash, Compliance, and the War for Talent - Episode # 103
Manage episode 421086526 series 3549986
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In this episode of Mission To Grow, Host Mike Vannoy is joined by Principal at Jackson Lewis P.C., Brian Shenker to discuss the recent FTC ban on non-competes.
They discuss the implications for businesses, including the broad ban on non-competes, enforcement mechanisms, and the limited exceptions for senior executives and the sale of businesses. Brian also offers practical advice for business owners to navigate the rule changes and protect their interests.
Takeaways:
- In April 2024, the FTC issued a rule banning non-compete agreements for employees at all levels, effective from September 4, 2024, unless delayed by legal challenges. Employees should prepare for possible legal actions that might impact the rule.
- Non-compete agreements can stifle competition, which is why the FTC views them as problematic. Eliminating non-competes could open up opportunities for new business creation and greater competition for positions, benefiting around 30 million people.
- While non-compete clauses are banned, there are other documents employers can still take advantage of. Non-disclosure and non-solicitation agreements can still be used effectively within the new regulations.
- Employers should recognize that the new rule broadly bans non-compete clauses in any form, including those found in handbooks and policies. Employers should review all of their documents to ensure proper compliance.
- While new non-compete agreements are prohibited from the effective date, existing ones with senior executives earning over $151,000 who are in policy making positions can still be enforced.
- Despite the general ban on non-compete clauses, exceptions exist for bona fide business sales to protect the buyer's interests. This rule allows even minority owners to be subject to non-compete clauses when selling their stake.
- The FTC may still apply its final rule to nonprofits, particularly in healthcare, if they engage in profit-making activities. Nonprofits should prepare to address challenges regarding the extent of the rule's applicability to their operations.
Quote of the Show:
- “Use this time wisely, 120 days is not that much time to prepare.” - Brian Shenker
Links:
- LinkedIn: https://www.linkedin.com/in/brian-shenker-53708712/
- Company Website: https://www.jacksonlewis.com/
Ways to Tune In:
- Spotify: https://open.spotify.com/show/2XThTdn7YC1lkAm0PgZUkj
- Apple Podcasts: https://podcasts.apple.com/us/podcast/mission-to-grow-a-small-business-guide-to-cash-compliance-and-the-war-for-talent/id1725890976
- Amazon Music: https://music.amazon.com/podcasts/328dddd0-3c4f-4b07-a0d3-13bdcb418486/mission-to-grow-a-small-business-guide-to-cash-compliance-and-the-war-for-talent?refMarker=null
- Audible: https://www.audible.com/pd/Mission-to-Grow-A-Small-Business-Guide-to-Cash-Compliance-and-the-War-for-Talent-Podcast/B0CS71KQFM?qid=1706208857&sr=1-1&ref_pageloadid=not_applicable&ref=a_search_c3_lProduct_1_1&pf_rd_p=83218cca-c308-412f-bfcf-90198b687a2f&pf_rd_r=A1ME8MBECSVZ6K4D7CNT&pageLoadId=QBtg12mqKsuZPLGY&creativeId=0d6f6720-f41c-457e-a42b-8c8dceb62f2c
- Podchaser: https://www.podchaser.com/podcasts/mission-to-grow-a-small-busine-5591006
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